- Planned combustion-engine business would have 19,000 employees
- State-controlled oil major expands into transport technologies
According to Bloomberg article published on March 1, 2023, Saudi Aramco is nearing a deal to acquire a stake in Renault SA and Zhejiang Geely Holding Group Co.’s planned combustion-engine venture to grow its footprint in transport, according to people familiar with the situation.
The world’s biggest oil company will take a minority stake, with Renault and China’s Geely planning to remain at parity, said the people, who asked not to be named as the negotiations are private. While a non-binding agreement could be announced as soon as this week, there’s no certainty it will be finalized, the people said.
Representatives for Saudi Aramco, Renault and Geely declined to comment.
The deal would help state-controlled Saudi Aramco grow in an industry shifting to battery power. While sales of fully electric vehicles are taking off, combustion-engine and plug-in hybrid autos will be in demand for years to come, especially in developing countries. The oil major is already working to develop technology that can reduce motor emissions and improve fuel efficiency.
The Renault and Geely venture — which doesn’t have an official name yet — will have 17 plants and 19,000 employees, with research centers in Europe, China and South America, and significant synergies in development spending and fixed assets, Renault told investors last year. The venture will also develop technologies for cleaner fuels, which is why Renault has been seeking an energy company as a partner.
Renault is revamping its corporate structure as part of a push to bolster profits, and in November said it’s pooling combustion assets with Geely to amass scale. That allows the maker of Dacia and Clio cars to cut costs and free up funds to invest in battery-powered models and a separate carveout of its EV business.
The venture adds to Geely’s and its founder Li Shufu’s web of automotive holdings in Europe, which includes stakes in Aston Martin Lagonda Global Holdings Plc, Mercedes-Benz AG and Lotus.
